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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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, I have a flat that I used to live in that I am thinking

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I have a flat that I used to live in that I am thinking of selling and would like to know what Capital Gains tax I would have to pay.
As I understand it I would be entitled to a certain amount of Private Residence relief as well as Lettings relief.
I have owned the property for 210 months
I lived in it for 54 months
I have been renting it out for the last 156 months.
The purchase price was £53,000 and I expect to sell for £115,000
I would appreciate if you could calculate the CGT I would pay but also show the calculations.

Leave this with me while I do some calculations for you.
Customer: replied 2 years ago.

Thanks Tony

Hi again. Here are the figures:

Exempt gain £21,257 (£62,000 / 210 months x 72 months)

Non-exempt gain £40,743 (£62,000 / 210 months x 138 months)

Letting relief £21,257 (lesser of £40,000, £21,257 and £40,743)

Annual Exemption £11,100 (assuming disposal in 2015/16 tax year)

Taxable gain £8,386

There are two rates of CGT, 18% and 28%. The rate or combination of rates that you will pay will be dependent on the level of your income in the tax year you sell it. The first £11,100 of any gains you make in the 2015/16 tax year will be tax free. Assuming you do sell it in the 2015/16 tax year, one of the following scenarios will apply:

1 If the sum of your 2015/16 income and the net taxable gain is £42,385 or less, you will pay CGT at 18% on the whole of the net taxable gain.

2 If your income in 2015/16 alone is £42,385 or more, you will pay CGT at 28% on the whole of the net taxable gain.

3 If your income in 2015/16 is less than £42,385 and the addition of the net taxable gain takes you over £42,385, you will pay some CGT at 18% and some at 28%.

The last 18 months of ownership of a property which has been your main home is an exempt period so that reduces the letting period gain.

I hope this helps but let me know if you have any further questions.
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